#Oil Price Crash Shattered Production Plans For US Shale, But There's Still One Hotspot Where BigOil Still Willing to Spend

Amid Oil Price Crash, Guyana and Suriname spared the ax.

Oil majors may be slashing spending and deferring development plans across the globe, but they remain committed to developing the newest offshore oil finds in the heart of Latin America.  

This from OilPrice.com: 

Long-Term Potential in Offshore Oil Projects 

These operators continue to view the oil discoveries offshore Guyana and Suriname as high-quality resources that deserve the full attention and financing even as oil prices are sitting below $30 a barrel. Abundant quality offshore resources could pump oil for decades, compared to a year or two of the wells in the U.S. shale patch, which are much cheaper and faster to design, drill, and develop, but which deplete much quicker than large offshore reservoirs.
For this reason, it shouldn't come as a surprise that Exxon said at the earnings call last week that it would be cutting production in the Permian, yet going full-steam ahead with the developments in Guyana.

ExxonMobil excludes offshore Guyana projects from capex cuts

Exxon Doubles Down on Guyana's Huge Oil Discoveries

"Guyana remains an integral part of our long-term growth plans and as such is a high priority," Exxon's chairman and chief executive officer Darren Woods said on the call. 


Operations at Liza Phase 1 have been largely unaffected by the COVID-19 pandemic, Exxon said. Thanks to the Liza Phase 1 development, Guyana officially joined the ranks of oil-producing nations at the end of December. Exxon and its partner, Hess Corporation, now believe that the recoverable resource base from 16 oil discoveries offshore Guyana is more than 8 billion oil-equivalent barrels.

The Reform of #Venezuela's #Oil Sector will depend on a long process of substantial redesign of the state’s legal and institutional framework.

Carlos Bellorin ( @CarBellorin), Venezuela's "reforms require a broad redesign of the state's legal and institutional framework."

"In Venezuela, the idea of what society and state should be...has been built with tales of hand-picked historical facts which have been manipulated by short-term populist policies and it's at the center of a social imaginarium...cast into unmovable beliefs that see us a rich country, blessed with natural resources, and as a país potencia."

It's really hard to question these assumptions due to the fact that society has absorbed them and made them part of its identity. Whoever tries to do so, may lose political capital, which would make their government unviable. That's why leaders opt to take the easier road: feed the myths with populist measures that strengthen their charisma and get them more support.

But in Venezuela, that has only been possible during sustained periods of high oil prices. Because these old beliefs assume that oil revenues are infinite and inexhaustible when they only conceal the most basic feature of oil markets: volatility, that every boom will end in a bust and that every bust will end in a boom. Continuously, cyclically, forever.

The unfortunate coincidence of many factors took us to the unimaginable and cruel situation that Venezuelans are going through today. In order to survive it, society will have to abandon long-standing dogmas.

 

Read the whole piece on Caracas Chronicles here: Without Fear, Beyond Reproach: the Reform of the Hydrocarbons Sector | Caracas Chronicles

https://www.caracaschronicles.com/2020/05/05/without-fear-beyond-reproach-the-reform-of-the-hydrocarbons-sector/

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MasterEnergy
@MasterEnergyRSS